Daily Market Analysis March 31st, 2015

Following Janet Yellen’s speech on Friday the week started out with a bang where the USD was concerned. The speech only strengthened the greenback (USD) as a complicated set of external influences are coming together within the global markets. Not to mention the week ahead is full of turmoil and provisions. For one, it is month end, ‘Jobs Week’ in the USA and Friday is a religious holiday known as Good Friday that more than 70% of developed countries observe. However with all of that the addition of Non-Farm payrolls will still be released anyway by the demands of Bureau of Labor Statistics. They said that they did take all of the above into consideration and felt that the report on the NFP for other traders that do not observe Christian beliefs maybe beneficial.

A warning on my part that this could lead the markets and currencies into rather unreasonable territories and this could further break down the core of the investor strategies and decision making in the days leading up to Friday and including Friday itself. Next week Monday could look rather confusing to traders. So perhaps going against the flow may just be the way to go towards the end of the week. The USD may further see some strengthening as the EUR may be out of play for the Easter weekend due to most European countries observing the holiday, and domestic spend is at a halt.

I have been keeping my eye on the USD / JPY for a while now as you know I often analyze this pair. Recently the BoJ (Bank of Japan) has employed their Quantitative and Qualitative Easing program and in relation to the Japanese economy it is immense, I have been seeking out a pattern that will engage the pair to reach an even higher level. On looking for this pattern across the charts, another pattern had made its way into my interest that could very well prompt me to stop. The USDs sudden burst of positive growth makes me look at other pairs such as GBP / USD and the EUR / USD. This is possibly my sign that it’s time to take profit and ride the bull where the USD is the saddle. While the USD / JPY are going strong this may not be permanent and could very well end sooner rather than later.

Today’s Trading Tip:

As mentioned above the next leg of the USD rally is about to hit currencies and commodities and outperform the pairs GBP / USD and the EUR / USD. The upside for the USD / JPY is that this pair is likely to mature and more so in the short term as it is the end of the Japanese fiscal year. Not great news for oil I am afraid, gains from early last week were already taken back by Thursday after Saudi Arabia started to rage a mini war and bomb Yemen. They give the impression that they are hardly concerned about the repercussion of the actions they take. Just illustrating how one countries news can significantly change the direction of any currency or commodity in moments.